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Gold Gains Support at $1,836 - What Could Drive an Uptrend Today?

Gold Gains Support at $1,836 – What Could Drive an Uptrend Today?

Posted Monday, June 20, 2022 by
Skerdian Meta • 2 min read

Following the heaviest weekly drop since early May, the gold price (XAU/USD) picks up bids to consolidate losses at around $1,840 during Monday’s Asian session. While the outlook for China appears to favor a corrective pullback, concerns about a global recession and higher Fed rates keep metal buyers cautious during a quiet session.

However, Reuters news that “President Joe Biden’s administration is reviewing the removal of some tariffs on China” joins upbeat covid news from Beijing and Shanghai to favor the market’s cautious optimism, which favors gold buyers. The Washington Post (WaPo), on the other hand, expressed concern about a problematic new economic climate as a result of the US Federal Reserve (Fed) rate hike of 75 basis points (bps).

According to the news, the Fed’s rate hike triggered a high-stakes test of the economy’s ability to wean itself off limitless credit and tolerate higher borrowing costs for consumers, businesses, and the government. Furthermore, Treasury Secretary Janet Yellen mentioned her expectations for an economic slowdown but dismissed recession fears.

XAU/USD

Wall Street benchmarks finished mixed during these maneuvers, and US Treasury yields remained under pressure. However, by press time, the S&P 500 Futures are up slightly. Moving on, GOLD traders should keep an eye on Fed Chairman Jerome Powell’s testimony for new impetus, as the Fed Boss is likely to be questioned on inflation woes to justify the recent rate hike.

Gold (XAU/USD) Technical Outlook

The gold price provided clear positive trade and remained supported above the 1836 level. However, it starts today with an apparent uptrend to settle above the mentioned level, which encourages us to suggest a bullish bias today. The leading indicators, such as stochastic RSI and RSI, are currently positive, driving a bullish bias for gold.

Above the 1838.10 trading level, gold has the potential to reinforce the uptrend trend, which will continue unless 1850.00 is breached and held above. Today’s trading range is expected to be between 1820.00 support and 1855.00 resistance. So, consider looking for buying trades over $1,836 and vice versa. Good luck!

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